Edible oil companies to reduce prices within week

Edible oil prices are likely to be reduced by 10-15% soon as the government has asked manufacturers to reduce prices within a week.Abhneesh Roy of Edelweiss Financial Service told ET Now that the development bodes well for both the FMCG companies and the consumers. FMCG companies such as HUL, Britannia, and Nestle are likely to see the benefits of the move in the second half of the year because palm oil is used in the manufacture of soaps, biscuits, noodles etc. He further said that FMCG companies rarely cut prices so they will benefit from margin expansions. Also, robust monsoons are likely to propel rural demand, in a good sign for FMCG players. But the impact on edible oil companies will be negative, he added.

The development comes a month after the Ministry of Consumer Affairs, Food & Public Distribution said the wholesale prices and retail prices of edible oils such as vanaspati, soyabean oil, sunflower oil and RBD palmolein have been decreased.The Department of Food Public Distribution (DFPD) Secretary Sudhanshu Pandey said that all major edible oil brands have cut prices by 10-15 rupees, and that falling prices will help cool inflation levels as well. He added that the price reduction was made possible through constant monitoring by the department, constant engagement with all stakeholders and multiple interventions.The government’s reduction of import duty on edible oils allowed FMCG players to pass on the benefit of reduced prices to consumers. Meanwhile, on Wednesday, the price of domestic LPG cylinders weighing 14.2 kilograms was hiked by ₹50 per cylinder, the third increase in rates since May on firming international energy prices. Bharatiya Janata Party (BJP) leader Varun Gandhi on Wednesday reacted sharply to the hike in liquified petroleum gas (LPG) cylinder prices, pointing out that as unemployment is at its peak, citizens are forced to make such expensive purchases for a critical household good. "The connection cost increased from ₹1,450 to ₹2,200. The security increased from ₹2,900 to ₹4,400. Even the regulator is costlier by ₹100," the Pilibhit MP's tweet, translated from Hindi, read.